Hedge Funds: A $1 Trillion Business?

By Collins, Daniel P. | Futures (Cedar Falls, IA), June 2004 | Go to article overview

Hedge Funds: A $1 Trillion Business?


Collins, Daniel P., Futures (Cedar Falls, IA)


Estimating the size of the hedge fund universe is a tricky venture--akin to counting gnats around a porch light. Growth in hedge funds has been widespread and well documented and is one of the reasons cited by the Securities and Exchange Commission to register all hedge fund managers. A recently released survey indicates that that growth has accelerated.

Alternative Fund Service Review (AFSR) and Correctnet's biannual survey of hedge fund administrators estimate the size of the hedge fund universe at $1.16 trillion. They surveyed 39 hedge fund administrators with access to more than 8,000 hedge funds and fund of funds. While the trillion dollar level serves as a nice round number, more impressive is that the figure is up from the mid 2003 estimate of $745 billion.

The survey claims that other estimates of the industry have undercounted its size, but their figures correspond with other estimates when taking into account the double counting of fund of funds. Tremont Tass Research put the industry at $750 billion at the end of 2003 and its Director of Research Stephan Jupp says preliminary results have that figure above $800 billion at the end of first quarter 2004. Van Hedge Fund Advisors puts the industry at $820 billion and estimates it will surpass $1 trillion in 2005. The AFSR survey included fund of funds, which invest in single hedge funds strategies, separately accounting for much of the imbalance.

Despite the impressive numbers, hedge funds are growing at a slower pace than managed futures, which recently passed $100 billion. Tremont reported a 25% increase in money under management in 2003 and approximates first quarter growth in hedge funds at less than 10%.

Barclay Trading Group estimated growth in managed futures for 2003 at 70% and reports an increase of 20.9% ($18.1 billion) for the first quarter of 2004. Barclay does not estimate the size of the hedge fund universe because there are too many variables. "The truth is no one knows. It is a big guess," says Barclay President Sol Waksman.

Comparing index returns

                                March   YTD

S & P 500 Total Return Index    -1.51%  +1.69%
Lehman Brothers Treasury Index  +1.65%  +5.68%
Morgan Stanley EAFE Index       +0.16%  +3.75%
Futures Public Funds (March)    -1.96%  +4.20%

March's top CTAs

                                            March    YTD

Barclay CTA Index                           +0.43%   +5.05%
Barclay Sub-Indexes:
Agricultural Traders                        +3.91%  +11.21%
Currency Traders                            -1.10%   +0.72%
Diversified Traders                         +0.10%   +6.41%
Financials and Metals Traders               -0.01%   +1.60%
Discretionary Traders                       +1.29%   +4.64%
Systematic Traders                          -0.15%   +4.42%

More than $10 million under management
1. DynexCorp Ltd. (TETRA High Beta)        +20.86%  +18.59%
2. AIS Futures Fund L.P. (3x-6x)           +17.76%  +46.16%
3. ADM Capital (GI. Perspectives Fund)     +14.20%  +27.30%
4. AIS Futures Fund II L.P. (2x-4x)        +11.61%  +28.81%
5. DynexCorp Ltd. (Currency)               +10.20%   +8.72%

Less than $10 million under management
1. Sjo, Inc. (GI. Divers.)                 +39.66%  +80.89%
2. Dynasty Capital Partners LP             +23.84%   +5.19%
3. Lawless Comm. (60% Max Drawdown Acct.)  +22.40%  +35.38%
4. Kottke Associates (Swinford)            +15.66%  +21.55%
5. Strategic Investments (Agricultural)    +15.08%  +47.19%

Based on eslimates of the composite of all accounts under management;
does not reflect the performance of any single account.
Source; Barclay Trading Group Ltd., Fairfield, Iowa: (641) 472-3456

Futures public funds summary

April 2004                                 Number reporting: 102
                                           Average performance for the
                                             month: -6. … 

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Hedge Funds: A $1 Trillion Business?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.